UPDATE 1-Brazil delays coffee price measures, growers furious

Reuters Staff

2 Min Read

(Adds producer quotes, details)

By Anthony Boadle

BRASILIA, Aug 5 (Reuters) - Brazil's government infuriated coffee producers on Monday, when it did not make an expected announcement about price support measures, and Agriculture Minister Antonio Andrade said the government needed more time to weigh options.

It was not clear when the measures would be announced in the world's largest coffee producer. Andrade said a possible date was Wednesday, when President Dilma Rousseff is expected to travel to top-producing state Minas Gerais.

"We wanted more than we could have announced today," Andrade told reporters at a news conference.

Producers in countries like Brazil and Colombia are increasingly pressuring governments to rescue them from slumping coffee prices, now below production costs. Coffee growers said they may hold protests.

"I'm selling coffee for the price of bananas," said producer Flavor Bahia who traveled 1,200 kilometers from Minas Gerais to listen to an announcement that never came.

Two sources told Reuters on Friday the government planned to support prices by purchasing 3 million bags of coffee from growers and selling options contracts at an auction to coffee producers or cooperatives, helping them set a minimum price.

Brazil officially established a minimum price for Arabica coffee at 307 reais ($132.90) a bag earlier this year. Producers expected the government to say it will buy the beans for much more to help them meet rising costs.

"Coffee producers are selling for whatever price they can find, around 280 reais," said Carlos Paulino, the president of Brazil's largest coffee cooperative, Cooxupe.

"Based on prior talks with the government, we had expected a price of 340 reais and that the government would buy 3 million bags," he told reporters.

September arabica coffee futures on ICE ended up 1.40 cents, or about 1.0 percent, at $1.1965 per lb on Monday. Last week, front month futures sank to a four-year low.